The Infamous Nigel Warren Case

May 28, 2013

Is Airbnb on the verge of being declared illegal in New York City?

Most individuals and organizations with a stake in the short-term rental industry have heard by now that an Environmental Control Board (“ECB”) Judge, Clive Morrick, has held that the renting of a room or rooms in a New York City apartment for less than 30 days is illegal. Several media sources, reporting the ruling, interpreted it as outlawing the vacation rental website, Airbnb, in New York City. [1]

What is the ECB?

As stated on the ECB’s website, the ECB “is a type of court called an administrative tribunal. It is like a court, but is not part of the state court system. ECB judges hear cases on potential violations of the laws that protect the City’s quality of life.” [2]

Background

In September 2012, Nigel Warren rented out his room in his New York City two bedroom apartment for a few days via the vacation rental website Airbnb. An important fact that we cannot emphasize enough is that Nigel Warren’s housemate remained in the apartment while the Airbnb guest was there.

Nigel Warren was slapped with a fine of a few thousand dollars by a City’s inspector for having allegedly violated various provisions of the Housing Maintenance Code, Zoning Regulations and Building Code.

Chapter 225 of 2010 (commonly referred to by the media as the illegal hotels law) provides that boarders or roomers may still rent for less than thirty days provided that they live within the household of the permanent occupant(s) (Section 27-2004 (a) (8) of the Housing Maintenance Code).

What does “living within the household of the permanent occupant” mean?

Judge Morrick’s decision is confused and confusing. He appears to have read a new requirement into Chapter 225 of 2010 — a requirement conflicting with the plain language of the statute, unsupported by the original legislative expectations and inconsistent with the agency’s precedents.

According to ECB Judge Morrick, one must have or intend to have a relationship with the permanent occupant if one is to be said “to live within the household of the permanent occupant.” He declared that the terms boarders and roomers in Chapter 225 of 2010 — specifically in Section 27-2004 (a) (8) of the Housing Maintenance Code– “refer to occupants sharing the life of the dwelling with its permanent occupant. It does not apply to complete strangers who have no, and are not intended to have any relationship with the permanent occupants.” In other words, according to ECB Judge Morrick, sharing a bathroom and a kitchen is not enough to qualify as sharing the life of a dwelling, the occupants must also “mingle” and intend to connect in meaningful ways.

Unfortunately, ECB Judge Morrick does not specify how intimate a boarder should be or should intend to be with the permanent occupant to qualify for the exception spelled in Section 27-2004(a)(8) of the Housing Maintenance Code?

ECB judges have consistently held that occupants of a residential apartment must maintain a common household to comply with the law. A “common household” is defined in Section 27-2004 (4) of the Housing Maintenance Code as follows: ““[a] common household is deemed to exist if every member of the family has access to all parts of the dwelling unit” [emphasis added].

In the Nigel Warren case, it is unclear whether the Airbnb guest had access to all parts of the apartment. In other words, we do not know whether any of the rooms were locked and inaccessible to her. We are merely told that the she had her own room and that she did not enter the roommate’s bedroom.

Evidence that ECB judges have looked at to determine whether occupants are occupying a residential apartment according to the law include:

– Whether there are locks on any of the rooms?
– Whether the occupants share a bathroom or a kitchen?

Some ECB judges have inferred from the existence of locks on individual rooms that the apartment or house was illegally altered for occupancy (in other words, some ECB judges have considered individually locked rooms as separate residences/apartments).

It should be noted that to the best of our knowledge, no ECB judge has ruled that an apartment was not occupied according to the law because the occupants had no intention to have a relationship with each other or to connect in meaningful ways.